Glossary of Terms

Absent Landlord - A Landlord that cannot be found.  Where a Landlord is 'absent' then an application can be made to the Leasehold Valuation Tribunal for an order enabling the RTM company to acquire the right.

Acquisition Date - Date when the RTM Company takes over the responsibility for managing the Block of Flats.

Block of Flats - Block of flats that is considering forming an RTM Company to make a claim for RTM. The Block must satisfy certain criteria in so far as that:   it is self-contained (or if part of another building, be capable of being redeveloped independently); it must contain at least two flats; at least two-thirds of the flats must be let to "qualifying tenants"; and part of it can be used for Commercial purposes but the Non-Residential part must not exceed 25% of the total floor area.

Claim Dispute Reasons - The only possible reasons that a Landlord can give in the Counter Claim Notice for disputing the Claim are whether (a) the Block does not qualify (b) the RTM Company does not comply with the legislative requirements; and (c) the Members do not represent at least half of the Qualifying Flat Owners in the Block.

Claim Notice Section 79 - A document sent to the Landlord by the RTM Company notifying the Landlord that the RTM Company is exercising the right to acquire the Right to Manage the Block.

Collective Enfranchisement - The 1993 Leasehold Reform Act (as amended) provides the right for the leaseholders (via a special Company - the Right to Enfranchise Company) to compel the Landlord to sell the Freehold to them.

Commercial Purposes - Part or parts of a Block that are used for non residential purposes.

Leasehold Reform Act 2002 - Act of Parliament which allows Flat Owners to take over the responsibility for the management of their Block.

Company Law - The aspect of law that governs the way that companies can operate.

Company Secretary - A person who is elected and responsible for the administration and compliance of the RTM Company with Company Law.  The Company Secretary can also be a Director.

Counter Notice Section 84 - A notice sent by the Landlord to the RTM Company that either admits that the RTM company is entitled to acquire the RTM or alleges that the RTM Company is not entitled to acquire the Right to Manage.

Determination Date - A date that is set at least one month after the Claim Notice (S79) is issued by which time the landlord must serve a Counter-Claim or accept that the RTM will be exercised on the Acquisition Date.

Director - A person who is elected and responsible for the running of the RTM Company. A Director is legally required to comply with company and health and safety law.

Duty to Provide Information Notice Section 93 - A notice sent by the RTM Company to the Landlord requesting information that will be required for managing the Block. This can be sent at any time after the Claim Notice has been issued.

Financial Obligations - Requirements to pay certain amounts on behalf of the Block such as for insurance, repairs, maintenance etc.

Flat Owner - The person who owns the lease of the flat.

Freehold - Ownership of the Block subject to any Leases granted.

Head Lessee - Ownership of the Head Lease from which the sub leases have been granted.

Landlord - The head Lessor or freeholder of a block.

Lease - The contract / agreement between a Lessor and lessee that sets out each party's rights and obligations.

Leasehold Property - A property upon which there is a Lease granted.

The 1993 Leasehold Reform Act (as amended) - provides the right for the leaseholders (via a special Company - the Right to Enfranchise Company) to compel the Landlord to sell the Freehold to them.

Leasehold Valuation Tribunal - The government body that determines disputes regarding matters concerning Leases, service charge disputes and the management of blocks of flats.

Lessee - Someone who owns a lease on a property.

Lessor - The person who owns the Freehold of the building & granted a Lease.

Long Lease - A Lease that was originally granted for more than 21 years at a premium and a low annual rent.

Memorandum and Articles of Association - Documents that control and determine the running of the RTM Company.

Non-Residential - Premises (or parts thereof) that are not used for residential purposes.

Notice of Invitation to Participate Section 78 - A notice sent by the RTM Company to all Qualifying Flat Owners in the Block inviting them to participate in the RTM Company.  This can be sent at anytime after the RTM Company has been formed but it must be sent prior to the issue of the Claim Notice.

Officers - The Directors and Company Secretary of the RTM Company.

Qualifying Flat Owner - A Lessee (i.e. someone who owns the Lease on the flat) who has a Long Lease i.e. one that was originally granted for more than 21 years at a premium and a low annual rent.

Qualifying Tenant - A Lessee (i.e. someone who owns the Lease on the flat) who has a Long Lease i.e. one that was originally granted for more than 21 years at a premium and a low annual rent.

Qualifying Leaseholder - A Lessee (i.e. someone who owns the Lease on the flat) who has a Long Lease i.e. one that was originally granted for more than 21 years at a premium and a low annual rent.

Reserve Fund - Money collected from Flat Owners over a period of time to provide for funds needed for future Major Works.

Right to Information Notice Section 82 - A notice sent by the RTM Company to the Landlord requesting information.  This can be sent anytime after the RTM Company has been formed and before the Claim Notice is issued.

Right to Enfranchisement - The 1993 Leasehold Reform Act (as amended) provides the right for the  leaseholders (via a special Company - the Right to Enfranchise Company) to compel the Landlord to sell the Freehold to them.

Right to Manage - The right for Flat Owners, via an RTM Company, to take over the management functions of the block of flats from the Landlord or the Landlord's appointed Manager.

RTM Company - A specific type of company (which is entirely different to a Limited Company) registered with Companies House that is limited by guarantee, to take over the management of the Block.

Self-Contained - A Building or Block that is structurally detached (or if part of another building, is capable of being redeveloped independently).

Service Charge - Payments by owners of flats to the Landlord / Managing Agent relative to the services provided to the Block, which would or may include items relative to insurance, maintenance / repairs, lighting and cleaning of the common parts and could also include such matters as communal central heating, porterage, lifts, etc.